Family Feud
(Republished from The Fifth Chapter Blog, original date 10/20/11)
A family in conflict is not a pretty sight. Before you know it, a family can begin litigation over the family jewels; the family dog; or most often control of assets. It can get ugly very quickly. Litigation squanders family resources, but sometimes it is inevitable. While it’s not what mom and dad would want or what two people intended as they walked down the aisle, it is sometimes unavoidable.
The conflict usually boils down to assets: personal; sentimental; collectibles; valuables; a business; or even a sports team, like the L.A. Dodgers.
When it gets ugly, the courts will often require, or the parties will agree to, a 3rd party, independent neutral to handle the estate while the conflict is being settled. This is done to preserve assets for the ultimate beneficiaries. The courts know that if a party to the litigation has control over the assets, they may not act for the benefit of all parties. In fact, they might reduce the value of the assets. This can happen in family or probate court.
A family owned business is often the center of the conflict. If one party has access to business assets or resources that are rightfully the property of the business; or the conflict is damaging the value of the business, a court will often name a 3rd party, independent representative to handle the business or estate.
The recent settlement of the divorce between Frank and Jaime McCourt may help the McCourt’s avoid this type of requirement imposed by the court, but sometimes a 3rd party neutral can help smooth over troubled waters. See the article in CNN by Alan Duke for more details. Husband Gets Dodgers in Divorce Court Deal..
According to Mr. Duke’s article, baseball Commissioner, Bud Selig has insisted that the L.A. Dodgers have an outside, independent “monitorâ€. While not the same as a fiduciary, his goal is similar. Presumably, he wants to preserve team assets and retain value for the ultimate owner. An estate which is facing conflict or litigation can often benefit from having an independent, licensed, professional, insured fiduciary named as the trustee or executor.
